If you and your spouse are in the process of getting a divorce, a range of issues will need to be addressed and resolved, such as custody, spousal support, child support, and the distribution of marital property. When it comes to property distribution, there are two types of property you should know. Separate property includes property you and your spouse owned before getting married. Marital property is any property or assets that were acquired by the couple throughout the marriage. If you and your spouse have a family business you established after getting married, this may be considered marital property and subject to the equitable distribution of property.
New Jersey is an equitable distribution state, which means that all marital assets are divided in a manner the court deems fair. If you and your spouse own a family business, distributing the assets can be complicated. When it comes to splitting a business in a divorce, there are typically three main strategies:
- Co-ownership: This option allows you and your spouse to continue owning the business jointly. In some cases, both partners may continue to participate actively in the business, or it may involve a primary partner managing the business, where the other partner continues to receive payments from the proceeds of the business.
- Buy out the other spouse: This is the most common way to handle a business during a divorce. There are several options when it comes to buying out the other spouse.
- Sell the business: This is the second most common option for handling a business during a divorce. If the business sells quickly and at a good price, you and your spouse may have the finances to pursue other opportunities.
How Can I Protect My Family Business During My Divorce?
One important step that may protect your business is to have a prenuptial or postnuptial agreement. This is an effective tool that spouses can use to protect certain assets and avoid common disputes related to properties and businesses. A prenuptial or postnuptial agreement allows you to negotiate an agreement that addresses various financial issues, including the terms that will protect your business if your marriage does not last.
A shareholder or operating agreement is another option that may protect your business. This outlines ownership and transfer restrictions, which prevent the transfer of a portion of the business. You can also restrict transfers by requiring shareholder approval for a transfer. A buy-sell agreement outlines what will happen to the family business during a divorce. The agreement may include provisions that require the sale of the buyout of the divorcing spouse’s ownership interest. A dedicated divorce lawyer will address these issues as you navigate the divorce process.
Our Whitehouse Divorce Lawyers at Tune Law Group, LLC Assist Clients with Divorces That Involve a Family Business
If you are going through a divorce and have a family business, do not hesitate to contact our Whitehouse divorce lawyers at Tune Law Group, LLC. We will protect your legal and financial rights throughout the divorce process. To schedule a free consultation, call us today at 908-434-1061 or contact us online. Our office is located in Whitehouse Station, New Jersey, where we serve clients in and around Hunterdon County, Monmouth County, Whitehouse, and Tewksbury.